Critical Analysis: Aircastle (NYSE:AYR) and Its Competitors

Aircastle (NYSE: AYR) is one of 17 publicly-traded companies in the “Equipment rental & leasing, not elsewhere classified” industry, but how does it contrast to its competitors? We will compare Aircastle to related businesses based on the strength of its dividends, profitability, valuation, earnings, analyst recommendations, institutional ownership and risk.

Volatility and Risk

Aircastle has a beta of 1.84, indicating that its stock price is 84% more volatile than the S&P 500. Comparatively, Aircastle’s competitors have a beta of 1.93, indicating that their average stock price is 93% more volatile than the S&P 500.

Institutional and Insider Ownership

61.9% of Aircastle shares are owned by institutional investors. Comparatively, 60.6% of shares of all “Equipment rental & leasing, not elsewhere classified” companies are owned by institutional investors. 1.8% of Aircastle shares are owned by insiders. Comparatively, 13.3% of shares of all “Equipment rental & leasing, not elsewhere classified” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Aircastle and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Aircastle $796.62 million $147.87 million 11.29
Aircastle Competitors $1.43 billion $243.35 million 1.23

Aircastle’s competitors have higher revenue and earnings than Aircastle. Aircastle is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Aircastle pays an annual dividend of $1.12 per share and has a dividend yield of 5.3%. Aircastle pays out 59.9% of its earnings in the form of a dividend. As a group, “Equipment rental & leasing, not elsewhere classified” companies pay a dividend yield of 2.2% and pay out 39.2% of their earnings in the form of a dividend. Aircastle has raised its dividend for 7 consecutive years.

Profitability

This table compares Aircastle and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aircastle 20.50% 9.05% 2.42%
Aircastle Competitors 6.36% 3.65% -0.36%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Aircastle and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aircastle 0 9 1 0 2.10
Aircastle Competitors 89 424 663 53 2.55

Aircastle currently has a consensus price target of $24.38, suggesting a potential upside of 15.41%. As a group, “Equipment rental & leasing, not elsewhere classified” companies have a potential upside of 14.48%. Given Aircastle’s higher probable upside, analysts plainly believe Aircastle is more favorable than its competitors.

Summary

Aircastle competitors beat Aircastle on 8 of the 15 factors compared.

Aircastle Company Profile

Aircastle Limited, through its subsidiaries, leases, finances, sells, and manages commercial flight equipment to airlines worldwide. The company also invests in other aviation assets. As of December 31, 2017, its aircraft portfolio comprised 236 aircraft leased to 81 lessees located in 43 countries. Aircastle Limited was founded in 2004 and is based in Stamford, Connecticut.

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